Previous studies have proposed that insulin increases the binding of insulin-like growth factor II (IGF-II) in isolated rat adipose cells by increasing receptor affinity (Ka). This study re-examines these observations under conditions in which receptor-ligand internalization is blocked by 1 mM KCN. In the absence of KCN, adipose cells bind 0.71 amol of IGF-II/cell with low apparent affinity, of which Greater than 75% is not accessible to trypsin. In contrast, in the presence of KCN, IGF-II binding is decreased by 95% and its apparent affinity increased. Moreover, Greater than 60% of the bound IGF-II now is sensitive to trypsin. In either the absence or presence of KCN, about 20% of the cell's total IGF-II receptors are present in the plasma membranes and about 80% in the low-density microsomes. Insulin induces a 5-fold increase in cell surface IGF-II receptors without a change in affinity when IGF-II binding is measured in the presence of KCN. Similarly, insulin increases IGF-II receptor concentration in the plasma membranes and concomitantly decreases that in the low-density microsomes. Receptor affinity in these two subcellular membrane fractions is not affected by incubation of intact cells with either insulin or KCN and is similar to that observed in intact cells in the presence of KCN. Addition of KCN prior to insulin abolishes all of these effects of insulin. These data suggest that (a) the effects of KCN reflect a selective blockade of endocytosis; (b) in the absence of KCN, IGF-II binds to receptors of constant affinity that cycle between the plasma membrane and an intracellular pool resulting in an accumulation of intracellular IGF-II; (c) insulin induces an increase in IGF-II binding by causing a steady state redistribution of receptors from this intracellular pool to the plasma membrane; and (d) this redistribution in the intact cell can only be detected using Scatchard analysis when recycling of the receptors is presented by KCN.